Question: Wife Working for Financial Company

B

Brabed

Hi all,

I am hoping some of you have experienced this or have knowledge that may help me. I currently trade Forex as well as a self directed ESA for my daughters' college fund.

My wife is going to work for a large fund company in September. One of the things they told her is that no one else in her household can be a trader. They didn't get real specific on what constitutes self directed trading. I'm hoping she will be getting more details soon, but in the meantime, I thought I'd ask because I'm sure some of you have experienced this. She thinks I would have to give up trading and I said, 'No way!'

My questions are:

Is this a company rule or is it a federal regulation? I know this one of the questions when applying for an account, so maybe it's a reg.

One of possible solutions is to create a corporate entity for my trading and therefore I am nothing more than an 'employee', would this work?

If she is working for fund company which is primarily dealing in equity mutual funds, could trading Forex be a no-no as well?

What's the purpose of this rule or reg?

Thanks in advance
 
Have her ask if you are still allowed to handle the family investments. And have them point you to the exact wording of the rule.
 
She will have to give them a list of all accounts currently open in her name and your name, they will then receive statements of those accounts. If they told her no one in the household can trade, that means no one can trade. I am sure they would rather fire her than to deal with potential regulatory issues from you not following the rules.

If they deal in equities they probably won't mind if you trade forex and futures, but make sure she gets written agreement from the compliance department and make sure the company is very aware of everything you are doing. I, personally, would never put my wife's job at risk.

Good luck

5yr
 
Quote from zdreg:

unless u are working under a license don't look for trouble by asking questions.
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So, in other words, keep it on the 'down low'. I got you, but, although my wife has never hassled me about my trading, I think she's going to be paranoid about this.
 
Quote from shortie:

why not put accounts in your girlfriend's name?
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Hey, yeah! Or you could put the accounts in your dog's name. Just make sure you get your dog to sign a will.
 
Quote from Brabed:

Is this a company rule or is it a federal regulation? I know this one of the questions when applying for an account, so maybe it's a reg.
More...
It is federal regulation. However, financial companies tend to have their own rules (which follow the main regulatory guidelines) and these rules may be overzealous compared to regulatory requirements. Some companies are international. So, their rules may be strict enouh to satisfy regulators in each of the jurisdictions the company operates in.

Quote from Brabed:

One of possible solutions is to create a corporate entity for my trading and therefore I am nothing more than an 'employee', would this work?
More...
This is totally wrong from every prospective. a) You are a trader even if you trade other people's money. b) The rules cover trading on your behalf such as a friend of yours trading funds of a company in which each of you owns 50%. c) You would set up a compny with explicite purpose to circumvent the rulse; If you keep trading as you are, you are just being ignorant.

Quote from Brabed:

If she is working for fund company which is primarily dealing in equity mutual funds, could trading Forex be a no-no as well?
More...
Forex is most likely just fine. You have right as person to exchnage cash currency. Forex trading is no different. However, if you trade derivatives such as fx futures or option, overzealous financial companies may object to this.

Similarly, the rules cannot deprive you from the right to invest in equity shares... but they may enforce a minimal holding period (say, a month) and your wife mau have to obtain a permission ifrom "compliance" before every trade is done.


Quote from Brabed:

What's the purpose of this rule or reg?
More...
The purpose is to prevent "insider trading".
 
Quote from 5yrtrader:

She will have to give them a list of all accounts currently open in her name and your name, they will then receive statements of those accounts. If they told her no one in the household can trade, that means no one can trade. I am sure they would rather fire her than to deal with potential regulatory issues from you not following the rules.

If they deal in equities they probably won't mind if you trade forex and futures, but make sure she gets written agreement from the compliance department and make sure the company is very aware of everything you are doing. I, personally, would never put my wife's job at risk.

Good luck

5yr
More...

Good answer, thanks. But what if I were 'trading manager' for XYZ Corporation or a private hedge fund. Then would we have to disclose?
 
Suggest you get input from the company before deciding on a course of action. Could be, they don't want you trading financial instruments because of potential front-running and or insider acts.

The company is likely to be what seems to be overly cautious or restrictive. That's partly because they can be held accountable for issues they didn't even know about... if they acts were committed by the spouse or children of someone the company is charged with the responsibility of proper supervision.... like, your employee wife.

Perhaps the company would say it's OK to trade commodity futures. You can trade them off of the charts just like anything else.
 
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